How blockchain technology will change the future of real estate
In September 2017, real estate history was made, when the first-ever property sale in the world was made using cryptocurrency.
The $60.000 flat in Kyiv sold via Ethereum smart contracts and entered the history books as the first real estate deal to be sold and transferred via blockchain. It was the first step into the future of global real estate.
Five years later and crypto has changed from experimental currency into innovative assets. The real estate industry has welcomed blockchain with open arms, but how will it impact the future of the market?
1. What are the many benefits of cryptocurrencies in real estate?
The benefits of automation, speed, and anti-inflationists assets, appeal to many, as well as the significant reduction in the risk of fraud. In fact, many companies have already started to buy and sell goods with crypto as a form of payment.
1.1 How does automation speed up the process of buying or selling real estate?
The introduction of the smart contracts made it possible to automate and secure the contracts, without intervention of third parties. The smart contract allows assets to be tokenized and exchanged worldwide. This added liquidity creates a globally accessible market, with less slippage for buyers and sellers. Transfers can be carried out automatically, according to the set conditions of the contract, and without room for human interpretation. This brings clarity and oversight into the transactions.
Moreover, all participating entities can be recorded in the blockchain, so it automatically pays out all parties involved. Before this development, real estate transactions often required face- to face interactions and many middle men. Blockchain paves the way to simplify data transmission, significantly reducing the time, and costs. For example, Imagine obtaining a mortgage without ever having to speak to a bank!
1.2 How does a smart contract create transparency?
A smart contract provides full access to the status and history of a property, shedding light on topics like title deeds, land registry, technical information and surveys, and co-ownership information throughout the years.
This can be accessed at all times, without the interventions of banks, notaries, or real estate agencies. This means more transparency, less risk of fraud, and less real estate agent dependency.
1.3 How does crypto function as an Anti inflationist asset?
Like gold, cryptocurrencies are limited digital assets, as there are only a certain number of them. This makes bitcoin a scarcity. Many investors are now choosing crypto over gold, viewing it as a better alternative hedge against inflation.
According to Vinshu Gupta (check out his LinkedIn here), Founder & Director, Nonceblox Blockchain: ‘the median annual return of investment is 408 per cent. When this is compared with 5-7 per cent rate of inflation, bitcoin does not only hedge your position, but it generates wealth.’
2. Is it safe to invest in cryptocurrencies?
When we talk about safety regarding blockchain, we really should be discussing two things:
- How stable is the value of cryptocurrencies?
- How safe are cryptocurrencies when faced with security risks?
2.1 How stable are cryptocurrencies?
Firstly, we have to understand that crypto still is a relatively young asset, that can be vulnerable to fluctuations in value. Many factors, such as supply and demand, media hype, and government regulations, contribute to create the price volatility. Some currencies are more prone to these price swings than others, but even the largest one, Bitcoin, has proven not to be a guarantee of stability.
More unstable currencies have been known to go up and down in double digits over the span of a couple of hours. Past performances do not predict future performances, so it is possible to gain or lose rapidly.
This is important to keep in mind when considering trading in crypto. You might want to consider a diverse portfolio of investments, and do not buy more than you can afford to lose.
2.2 How big is the cybersecurity risk?
Then, let's discuss cybersecurity: where crypto outweighs gold with its characteristics that it cannot be stored, nor physically stolen, it can be hacked. Scams are a growing concern. Phishing, hacking, or NFT-scams are increasingly prevalent. Being so young on the market, it is appealing for criminals and scammers, who gladly take advantage of the offered anonymity and permanence of transactions. In contrast to payments with a normal debit card, transactions with crypto offer limited legal protection. For example, if a fraudulent purchase is made in your name, you might not be able to get a refund because blockchain transactions are generally irreversible.
You can prevent these scams by using a reputable and regulated exchange platform, like XEROF. They are a regulated Swiss Cryptocurrency Exchange for real estate and luxury goods. They follow protective guidelines such as Know Your Customer (KYC) and Anti Money Laundering (AML) to protect your safety. Platforms like these are your best bet if you are starting with investing in crypto.
2.3 What if I lose the password to my digital wallet?
Perhaps the worst way to lose access to your money is simply by forgetting the password to your digital wallet. You’ve probably heard about the German programmer Stefan Tomas, whom’s wallet values over more than 270 million dollars, as of February, this year. The only problem is; he lost the paper containing his access code, which gives users 10 tries, before it encrypts itself forever. After 8 failed attempts, he chose to store his wallet in a secure facility, to await new ways of cracking its code.
Luckily for Mr. Thomas, he has made peace with the situation, saying: ‘I got to a point where I said to myself, let it be in the past, just for your own mental health,’ according to an article in the New York Times. This may be due to the fact he managed to secure enough bitcoins (and passwords) to live a luxurious life after all. This, however, might not be the case for everyone who forgets their password, so be careful before you lock yourself out.
3. How can cryptocurrencies help me invest in real estate?
Hansson and Hertzell now collaborates with XEROF, one of the companies that provides regulated crypto exchange for real estate. The company is based in Switzerland and was founded by Swedish entrepreneurs, real estate experts, and cryptocurrency pioneers. They provide exchange custody and escrow services for virtual assets. They accept bitcoin, Ethereum, and tether, turning them into EUR, USD, and CHF.
The risks that were mentioned earlier are minimized by using a legitimate platform like XEROF. Our clients can count on the safety of this system because they combine wallet technology MPC-CMP with hardware isolation to create a layered security technology.
The only thing you need to get started is a crypto wallet:
1. Create an account on www.xerof.com and finalize your KYT/KYC & AML.
2. Upload the purchase agreement and legal documents.
3. Send Crypto. Send BTC, ETH, or USDT to XEROF.
4. Exchange. XEROF exchanges crypto to CHF, USD, or EUR as requested.
5. Get paid. XEROF pays out the fiats to the seller’s bank account.
By following these simple steps, you can now safely start trading and investing in real estate with crypto. Please don't hesitate to let us know if you have any questions, suggestions or comments on this topic. We are looking forward to taking this opportunity and innovate the market of real estate together.
Don't forget to follow Hansson & Hertzell on Facebook, LinkedIn, Instagram, and Youtube, to stay updated with all our new projects!
Or take a look at our portfolio of Quality Properties:
Welcome to Hansson & Hertzell and the healthiest country in the world!
Sources:
2. https://n26.com/en-eu/blog/is-cryptocurrency-safe
3. https://appinventiv.com/blog/understanding-cryptocurrency-price-shift-in-market/
4. https://www.finsmes.com/2022/01/future-has-come-the-rise-of-crypto-and-real-estate.html
6. https://www.nytimes.com/2021/01/12/technology/bitcoin-passwords-wallets-fortunes.html
Back
Call us
Send message
